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The fact that people on hacker news are angry about this cracks me up. The vast majority of folks here really are the crotchety programmers. Yes, a founder get

The fact that people on hacker news are angry about this cracks me up. The vast majority of folks here really are the crotchety programmers. Yes, a founder gets compensated significantly more than early employees. Massive shocker. If those early employees were talented enough, they’d be founders getting compensated. I don’t know when this dramatic shift happened to Americans to believe building a successful company is mostly luck, but it’s depressing. Shame on you, HN.

marcinzm 6y ago
>I don’t know when this dramatic shift happened to Americans to believe building a successful company is mostly luck, but it’s depressing. Because it's true? Studies (Gompers, et. al. (2009)) indicate that a second time entrepreneur has a 30% chance of success versus a 20% for a first time one. So there's some skill in it but it mostly comes down to luck. edit: And if you're arguing skill then clearly the skill of the early employees matter tremendously and not just the skill of the founder. So why do you think it's wrong for those employees to get more stake?
- nxmnxm99 6y ago
  The fact that that’s your conclusion based on that “study” is exactly why success is easy for some of us
- dasil003 6y ago
  Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome. The idea that we reduce outcomes to two buckets, success and failure and then flip a coin is reductive and belies the decisions and effort that lead every human endeavor to its own unique outcome. Keep in mind corporate projects fail all the time too, we just don’t talk in these terms because people’s salaries and jobs aren’t on the line. Of course luck matters tremendously in terms of riding a series of waves to make a billion dollar company, but it was paved with hard and deliberate work every step of the way. The founders could have reacted and changed direction completely at any stage along the way, therefore these fixed percentage figures are meaningless. How hard did each of those founders work? How many pivots? What type of businesses? What skill sets did they bring? And to your last point, who is saying it’s wrong for employees to get more stake? Of course it’s not wrong, but as an employee you have to negotiate that. People can’t just magically get what they feel they deserve because it would add up to way over 100%. Remember, the company exists because of the founder, doesn’t matter how much you think you contribute, because at the end of the day the company does not exist without them. If you can convince them to give you more then you should, and if you can’t you are free to start your own company. I do not see what is so unfair about this situation and I say that as instrumental #1 employee who got less than 1% for a 9-year effort building a moderately successful company. You don’t get what you deserve in life, you get what you negotiate.
  - marcinzm 6y ago
    > You don’t get what you deserve in life, you get what you negotiate. And negotiation require knowledge. This thread is about being told to not discuss that knowledge publicly and to not acknowledge the real life implications of certain equity splits. As I said in another comment, this is like saying employees should have negotiated better salaries and then firing them for discussing salaries.
  - M2Ys4U 6y ago
    >Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome. The two aren't mutually exclusive. Startup outcomes are mostly luck, led by people who (have to?) believe that they aren't.
    - nxmnxm99 6y ago
      Sorry, what exactly about Baremetrics is luck? You people seem to fixate on the Facebooks of the world instead of the other 99% of businesses built on blood, sweat and tears. Probably because most of this website sits behind a desk writing software thinking it gets sold because of magical fairies and luck, not 10000 agonizing cold calls.
- kjksf 6y ago
  Per your data they do 50% better the second time. That clearly shows a vast improvement in skill. A luck doesn't improve over time. If it was "mostly" luck they would get roughly the same outcomes the second time.
hn_throwaway_99 6y ago
I respectfully very much disagree. Even Sam Altman has been arguing that founders should give more equity to startups, mainly because employees who are usually sold on "equity dreams" are all coming to realize those equity dreams are peanuts.
- nxmnxm99 6y ago
  “Even Sam Altman” really, the patron saint of getting credit for other people’s work and risk agrees with that waffley sentiment? Shocker
  - Veen 6y ago
    Isn’t getting credit and cash for other people’s work exactly what you’re advocating.
    - nxmnxm99 6y ago
      Not at all, it only seems that way to you because you have zero sense of what risk/reward actually means. Employees were paid for their value determined by the market. Josh is just now being compensated for the immense amount of risk and deferred cash he gave up to build this company in the early days. There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions.
      - hn_throwaway_99 6y ago
        > There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions. And I think the primary reason is that many early engineers don't realize what a shitty deal they're getting. The purpose of this thread is to let them know that, so eventually startups won't be able to hire employees with such shitty terms.
        nxmnxm99 6y ago
        Yeah, except that’s not how negotiations (or the market) works. Go have fun negotiating 3% equity deals and six figure salaries to write Go all day, I’ll hire a smarter engineer for half the price from Kiev or São Paulo.
Veen 6y ago
That rests on the perverse assumption that founders are the most talented and deserving individuals in the universe, and everyone one else should be happy to uncomplainingly serve the interests of these fabulous ubermensch. To say that’s a naive and inaccurate view of the world would be an understatement.
- nxmnxm99 6y ago
  Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough.
  - marcinzm 6y ago
    So one is supposed to negotiate for higher equity but at the same time those who have gone through it aren't supposed to discuss their experience and payout? I suspect you're also one of those people who says employees should just have negotiated better salaries but also fires them for discussing salaries.
  - hn_throwaway_99 6y ago
    > Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough. Seriously, what is your point here, besides acting like a jerk? I mean, I totally agree with you, but that's why I think this thread is important. It should be a lesson to potential startup employees about how extremely lopsided the risk/return considerations are, that most equity deals are complete shit at startups, and that you should usually demand more equity if you have any negotiating power. Indeed, the purpose of threads like this should be to convince startup employees as a whole that they're getting screwed on equity so they should demand more.
    - goatherders 6y ago
      I didn't think it was a jerk comment at all. Your point is 100% right though. Early startup employees rarely understand the risk/reward. Surely none of the 10 employees at a 7 year old software company doing 1.6M a year thought they were on a rocketship.

marcinzm 6y ago

>I don’t know when this dramatic shift happened to Americans to believe building a successful company is mostly luck, but it’s depressing. Because it's true? Studies (Gompers, et. al. (2009)) indicate that a second time entrepreneur has a 30% chance of success versus a 20% for a first time one. So there's some skill in it but it mostly comes down to luck. edit: And if you're arguing skill then clearly the skill of the early employees matter tremendously and not just the skill of the founder. So why do you think it's wrong for those employees to get more stake?

nxmnxm99 6y ago
The fact that that’s your conclusion based on that “study” is exactly why success is easy for some of us
dasil003 6y ago
Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome. The idea that we reduce outcomes to two buckets, success and failure and then flip a coin is reductive and belies the decisions and effort that lead every human endeavor to its own unique outcome. Keep in mind corporate projects fail all the time too, we just don’t talk in these terms because people’s salaries and jobs aren’t on the line. Of course luck matters tremendously in terms of riding a series of waves to make a billion dollar company, but it was paved with hard and deliberate work every step of the way. The founders could have reacted and changed direction completely at any stage along the way, therefore these fixed percentage figures are meaningless. How hard did each of those founders work? How many pivots? What type of businesses? What skill sets did they bring? And to your last point, who is saying it’s wrong for employees to get more stake? Of course it’s not wrong, but as an employee you have to negotiate that. People can’t just magically get what they feel they deserve because it would add up to way over 100%. Remember, the company exists because of the founder, doesn’t matter how much you think you contribute, because at the end of the day the company does not exist without them. If you can convince them to give you more then you should, and if you can’t you are free to start your own company. I do not see what is so unfair about this situation and I say that as instrumental #1 employee who got less than 1% for a 9-year effort building a moderately successful company. You don’t get what you deserve in life, you get what you negotiate.
- marcinzm 6y ago
  > You don’t get what you deserve in life, you get what you negotiate. And negotiation require knowledge. This thread is about being told to not discuss that knowledge publicly and to not acknowledge the real life implications of certain equity splits. As I said in another comment, this is like saying employees should have negotiated better salaries and then firing them for discussing salaries.
- M2Ys4U 6y ago
  >Anyone who believes startup outcomes are mostly luck doesn’t have what it takes to be a successful founder—you need to have the belief that you can shape the outcome. The two aren't mutually exclusive. Startup outcomes are mostly luck, led by people who (have to?) believe that they aren't.
  - nxmnxm99 6y ago
    Sorry, what exactly about Baremetrics is luck? You people seem to fixate on the Facebooks of the world instead of the other 99% of businesses built on blood, sweat and tears. Probably because most of this website sits behind a desk writing software thinking it gets sold because of magical fairies and luck, not 10000 agonizing cold calls.
kjksf 6y ago
Per your data they do 50% better the second time. That clearly shows a vast improvement in skill. A luck doesn't improve over time. If it was "mostly" luck they would get roughly the same outcomes the second time.

hn_throwaway_99 6y ago

I respectfully very much disagree. Even Sam Altman has been arguing that founders should give more equity to startups, mainly because employees who are usually sold on "equity dreams" are all coming to realize those equity dreams are peanuts.

nxmnxm99 6y ago
“Even Sam Altman” really, the patron saint of getting credit for other people’s work and risk agrees with that waffley sentiment? Shocker
- Veen 6y ago
  Isn’t getting credit and cash for other people’s work exactly what you’re advocating.
  - nxmnxm99 6y ago
    Not at all, it only seems that way to you because you have zero sense of what risk/reward actually means. Employees were paid for their value determined by the market. Josh is just now being compensated for the immense amount of risk and deferred cash he gave up to build this company in the early days. There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions.
    - hn_throwaway_99 6y ago
      > There's a reason the market doesn't compensate every early employee at a meh SaaS company with millions. And I think the primary reason is that many early engineers don't realize what a shitty deal they're getting. The purpose of this thread is to let them know that, so eventually startups won't be able to hire employees with such shitty terms.
      - nxmnxm99 6y ago
        Yeah, except that’s not how negotiations (or the market) works. Go have fun negotiating 3% equity deals and six figure salaries to write Go all day, I’ll hire a smarter engineer for half the price from Kiev or São Paulo.

Veen 6y ago

That rests on the perverse assumption that founders are the most talented and deserving individuals in the universe, and everyone one else should be happy to uncomplainingly serve the interests of these fabulous ubermensch. To say that’s a naive and inaccurate view of the world would be an understatement.

nxmnxm99 6y ago
Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough.
- marcinzm 6y ago
  So one is supposed to negotiate for higher equity but at the same time those who have gone through it aren't supposed to discuss their experience and payout? I suspect you're also one of those people who says employees should just have negotiated better salaries but also fires them for discussing salaries.
- hn_throwaway_99 6y ago
  > Or, you know, negotiate higher equity and stop bitching and moralizing when your payout isn’t high enough. Seriously, what is your point here, besides acting like a jerk? I mean, I totally agree with you, but that's why I think this thread is important. It should be a lesson to potential startup employees about how extremely lopsided the risk/return considerations are, that most equity deals are complete shit at startups, and that you should usually demand more equity if you have any negotiating power. Indeed, the purpose of threads like this should be to convince startup employees as a whole that they're getting screwed on equity so they should demand more.
  - goatherders 6y ago
    I didn't think it was a jerk comment at all. Your point is 100% right though. Early startup employees rarely understand the risk/reward. Surely none of the 10 employees at a 7 year old software company doing 1.6M a year thought they were on a rocketship.